The state, with less leeway | The constra …

"The free trade agreement with the European Union (EU) restricts the state's room for maneuver in the application of development policies. In the historical context of controversy over the model between the liberal schema and the developmentalist schema, this opens the way, although there is no consensus in society about this debate, "explains Julieta Zelicovich, PhD student in international relations at the university. of Rosario and researcher of Conicet. In dialogue with Page / 12Zelicovich badyzes that the signing of the agreement comes to coordinate the electoral interests of Mauricio Macri and the need for Jair Bolsonaro to change the axis of the political agenda in Brazil with a process of renewal of the authorities of the European Commission which obliged it to show results. He expects negative effects on national employment and warns that the agreement contains serious deficiencies in terms of social legitimacy.

-How is the understanding understood of international politics?

– This is reflected in the dispute over global trade governance. The global economy is focused on three poles: the United States, Europe and China, but this governance is disputed, there is no clear leadership. And each pole develops strategies to force the rules to its side. Europe seeks to develop power and does it in its own way, that is, through rules-based trade, but tailor-made standards. The European Union is seeking to conclude free trade agreements within the framework of standards systems that are already operating in this country.

So, not only is the EU a much more powerful trading counterpart, but the rules are tailored to your needs.

-Yes, that's why it's a strong business definition. Argentina has the characteristic that there is no consensus on the model of economic development. This agreement limits the scope for maneuvering this pendulum. This reduces the scope for applying development policies. It's a turning point.

-What economic policy instruments would be restricted?

-A clear example is the elimination of withholding taxes to the EU, which affect a significant tax resource. Another example is the reduction of tariffs, which generally protect local production of goods. There are also very limited phytosanitary and technical import restrictions, as well as the role of public enterprises, which is another element of development policy.

-The agreement contains structural definitions on economic issues in which there is an important historical dispute, which is now reflected in the main options of this presidential election. What does this original deficit imply in the debate of the agreement?

Practically, there has been no intervention by civil society, chambers of commerce or legislators. And the few consultation mechanisms barely transcend the city of Buenos Aires. Therefore, the ratification of the agreement to be made by all the national parliaments concerned is, in the case of Argentina, directly related to the political composition that it will have at the time of processing.

-What relationship between this political weakness and the possibility of partial ratification supported by the Argentine government?

-The planned execution is taken into account. This implies that once the European Parliament has ratified the commercial part, the ratification in Mercosur will be done by country. That is, if Brazil ratifies, it will come into force there. This implies a pressure mechanism, because the one that does not ratify ratifies competition European importers who enter the neighboring country without benefiting from the agreement on their exports.

– What are the expected effects of the agreement on the Argentine economy in the medium term?

-It seems that the benefits of Europe are more interesting than those of Mercosur. In fact, Mercosur's tariff barriers are currently higher and the entire system of protection for European agriculture will remain in place. The positive effects for Argentina are manifested in the sectors of food exports where the European Union releases import quotas, such as meat, dairy products, chicken, pork, rice and honey. There are also opportunities for exporting services. On the other hand, sectors competing with imports, such as cars and other transport equipment, textiles, chemicals, clothing, wood, paper, metals and machinery, are damaged. These are the sectors that involve more work. On the other hand, exports to the rest of Mercosur would also be relegated to the background because they would be faced with increased European competition. In the case of individual consumers, the supply of European products would be larger at lower prices.

-What would be the net effect on employment?

-The problem is to know what is the capacity of the sectors offering greater export opportunities to absorb jobs lost due to the closure of factories due to the increase in imports . What we see in other economies, for example, in the US industrial cord, is that large sectors are not reorganizing and causing much discontent. The problem of employment is serious.

– What role will European agricultural protection mechanisms continue to play that could negatively affect the group of winning export sectors?

-The European trade system for agricultural products has barriers that go well beyond tariffs. What is certain, is that companies that intend to take advantage of the new quotas that Europe will open (these are quotas contrary to the total opening of Mercosur) will have to adapt their production processes . There is potential, but to take advantage of it, it is necessary to invest in terms of traceability, environmental standards and certifications. What is also clear is that the European Union will not disarm its subsidy system.